House sends budget cut bill to Bush’s desk

updated 5:54 p.m. ET Feb. 1, 2006

WASHINGTON - The House on Wednesday narrowly approved Congress’ first attempt in eight years to slow the growth of benefit programs like Medicaid and student loan subsidies, sending the measure to President Bush.

The bill passed by a vote of 216-214, largely along party lines. Republicans hailed the five-year, $39 billion budget-cutting bill as an important first step to restoring discipline on spending. Democrats attacked the measure as an assault on college students and Medicaid patients and said powerful Washington lobbyists had too much influence on it.

The measure is a leftover item from the GOP fall agenda. Bush is eager to sign it into law.

It blends modest cuts to Medicaid, Medicare and student loan subsidies with a renewal of the 1996 welfare reform bill and $10 billion in new revenues from auctioning television airwaves to wireless companies. There’s also $1 billion in new spending to extend an income subsidy program for dairy farmers and a reprieve for physicians who had faced a 4 percent cut in Medicare fees.

The $39 billion in cuts are generally small — a 0.4 percent cut in Medicaid funding and 0.3 percent cut in Medicare over five years — compared with deficits expected to total $1.3 trillion or more through 2010. Still, the bill set off a brawl between Democrats and Republicans and whipped up opposition from interest groups like AARP.

Senate changes forced House revote
The House passed a nearly identical bill on Dec. 19, but the chamber held an unusual revote because Senate Democrats forced technical changes that the House needed to accept before the bill could be sent to Bush’s desk.

Republicans said the measure is a necessary first step to reining in the burgeoning growth of so-called mandatory spending programs like Medicare, which threaten to swamp the budget as the baby boom generation starts retiring.

“The Deficit Reduction Act seeks to curb the unsustainable growth rate of mandatory programs that are set to consume 62 percent of our total federal budget in the next decade if left unchecked,” said Rep. Adam Putnam, R-Fla. He said many such programs “are outdated, inefficient and excessively costly.”

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